In most systems, fares just about cover the cost of collecting fares. They contribute little if anything to operating expenses. Their effect is to limit usage. That could be desirable, but usually not.

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IncreasePosts 3 hours ago | parent [-]

I've tried to calculate this for the New York City Metro, but they spend about $1 billion per year collecting $5 billion per year, out of a budget of $20 billion per year. Year so they would need to make up about $4 billion per year if they were to eliminate fare collection, or increase the budget by 20%.

In my mind it would be a no-brainer for all the benefits you would get from free service, but 20% increase in cost is not an easy sell - especially when a lot of people paying tax on it never go to NYC

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HPsquared an hour ago | parent | next [-]

If more people use it, the operating cost will increase. So it'll be a bit more than 20%.

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bardak 3 hours ago | parent | prev [-]

While we should never expect public transit to be self funding removing fares removes the ability for transit funds to scale with ridership, there is a reason that farebox ratios are correlated with ridership.

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kiba an hour ago | parent | next [-]

It's self funding in places like Japan and Hong Kong, but these places also engage in value capture. Train services in these places are basically real estate companies with trains attached to them. They diversified by making train stations shopping malls.

In any case, cities can engage in value capture for public transportation. Just direct some of the property taxes collected directed to public transit. Even better would be some sort of LVT, ideally but not necessary 100% of the economic rent from land.

In any case, public transit should also engage in value capture on their own property. If they own a train station, they should consider building on top or adjacent to it spaces that they can then rent out to tenants. It's not only efficient but also serve the public and the local economy and making public transit more economical to run due to higher ridership.

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nine_k 27 minutes ago | parent | next [-]

NYC also has subway statios with intense commerce, e.g. the Columbus Circle, or some bits around Herald Square. As a regular user, I find this convenient.

Almost every smaller station shows ads on walls, too, and every train carriers ads inside.

I don't see why the subway specifically could not be self-sufficient, or even a profit center. Sadly, this is not so, because of very large expenses, not because of low revenue.

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Spooky23 20 minutes ago | parent | prev | next [-]

Japan uses employer subsidy to break even. It a below the line tax in the same way health insurance is in the US.

	▲	EE84M3i 7 minutes ago \| parent [-]
		What do you mean by employer subsidy here? Are you referring to the system where employers reimburse the costs of transit fees for commutes? Many companies in Tokyo prevent their employees from commuting by car (legally commute is covered by workers comp insurance, and many companies do not elect the more expensive car coverage option) - so even in the absence of workers paying for the commute, public transit (or bike/walk) would be the only realistic option.

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ericmay an hour ago | parent | prev [-]

> They diversified by making train stations shopping malls.

Like airports in America. We should pursue a similar path for our rail stations and, frankly, ensure they are heading toward locations that are walkable and connected.

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II2II 2 hours ago | parent | prev [-]

Sure, yet it also established a double standard. In my neck of the woods, most busses operate on municipal roads. Municipal roads are funded by municipal taxes, and the municipality does not have the right to charge fuel taxes. The revenue that they collect from drivers is from parking and parking permits in a tiny fraction of the city, as well as property taxes on the low value land used for parking lots. City council would face a bloodbath if they tried to increase revenues for road maintenance directly from road users. Never mind asking those users cover the cost of appropriating land and new road construction, which is being driven by the excessive use of vehicles that are occupied by one or two people. Yet transit users are typically expected to fund about half of transit operations. If they're lucky, the provincial or federal government will throw some money their way for new busses.

	▲	rootusrootus 41 minutes ago \| parent [-]
		It's hard to draw a direct comparison because people who never drive still benefit significantly from the existence of the roads. It might be possible to drill down far enough so that it was charged directly to every use case for the road, but I bet it would end up in about the same place in the end but with a lot more bureaucracy.